If a repair shop intends to sell an abandoned vehicle with a missing title, Colorado’s amendment SB 144 states that they would need to provide a surety bond of twice the amount of the retail fair market value of the vehicle. This law became effective January 1, 2009.
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Colorado Lost Vehicle Title Bond
August 25, 2009 by Lisa GrimsleyCategory: Commercial Bonds, Misc. Commerical Bonds, Surety NewsTags: bond requirements, co, colorado, legislation, lost vehicle title, surety bond, title bond | Comments (0)
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Understanding the Surety Process
January 17, 2009 by Heidi WolfThe surety underwriting procedure can often be viewed as being an agonizing ordeal for insurance agents as well as applicants needing to obtain bonds. Many times, the entire process can be very aggravating and stressful if an applicant is under a specific deadline or needs a bond very quickly. Here are some items that the surety company will most likely require. It is important to know what crucial information that a surety company or agency will require in order to be approved for any type of surety bond.
Like insurance, the surety industry is recurring. In the mid 90s, the surety industry was very pliable, and there was little underwriting being performed. A combination of the slowing economy and the poor underwriting practices from years prior caused the surety industry to suffer for the first five of five consecutive years in 2000. However, a booming economy led to more bond approvals and issuance, even for applicants that were less than qualified.Fortunately, these losing years caused the market to fluctuate almost overnight underwriting standards were tightened and premiums increased substantially. Capacity quickly became an issue for contractors, particularly at both the small and large ends of the spectrum. Small, emerging contractors were finding it increasingly more difficult to obtain any bonding capacity and large contractors were also feeling the affects of the more stringent industry. The market has fluctuated over the past couple of years, and contract bonds and some commercial bonds can still be difficult to obtain. Some items that are crucial to obtaining prior to applying for a surety bond are:
A surety bond is a form of credit. The underwriter requiring financial information from an applicant is making a credit decision without ever meeting the contractor or applicant.. There may be a substantial amount of paperwork required; however, it may be the extra paperwork required that will get an applicant approved for a bond. An underwriter will most likely request the following:
Business financials It is beneficial and most often a requirement that these are prepared by a CPA. If it is a new company, submitting the most recent business financials will suffice.
Category: Auto Dealer Bonds, Bid Bonds, Commercial Bonds, Contract Bonds, Contractor License Bonds, Court Bonds, General Bonding, Misc. Commerical Bonds, Money Transmitter Bonds, Mortgage Banker Bonds, Mortgage Broker Bonds, Performance Bonds, Subdivision Bonds, Telephone Solicitor Bonds, Title Agency Bonds, Wage & Welfare BondsTags: application process, procedures, surety process, underwriting | Comments (3)
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California Wholesaler or Nonresident Wholesaler Surety Bond
December 17, 2008 by Steve VargaA wholesaler license is compulsory for any company or business that brokers, distributes or transacts the retailing or return of dangerous drugs or dangerous devices into or inside California to other wholesalers, pharmacies or practitioners.
A licensed manufacturer that only dispenses drugs of their own manufacture, all of which have an accepted new drug manufacturing application on file with the FDA (Food and Drug Administration) are free from having to acquire this surety bond obligation. If you need to document this exemption all you need to do is provide the California State Board of Pharmacy a list of manufactured drugs which would include the respective NDC Number (National Drug Code, which is a universal product identifier for human drugs) along with a statement certifying that the business only distributes its own products.
Any contender for initial licensure or license renewal as a wholesaler or nonresident wholesaler (previously known as an out-of-state distributor or dispenser) must present a surety bond of $100,000 made payable to the Pharmacy Board Contingency Fund. All new businesses and/or companies must do one of the following three (3 )options in order to get their license: 1) Obtain the required $100,000 surety bond, 2) obtain an ILOC (Irrevocable Standby Letter of Credit) or 3) provide a Cash Deposit in Lieu of Bond. The ILOC is a document issued by your bank that essentially acts as an irrevocable guarantee of payment to an obligee. This means that if you do not perform your obligations, your bank pays. ILOC’s cannot be cancelled or amended without all the parties in agreement. A Cash Deposit In Lieu of Bond is essentially the principle (or Assignor as they are know in this instance) providing the required cash dollar amount to the California State Board of Pharmacy that is equivalent to that of the surety bond requirement. It is understood that the Board is not authorized to give back the cash deposit until sixty days beyond the date upon which an owner no longer licensed by the Board, or ceases to do business as a wholesaler.If your company and/or business own several subsidiary companies that are reflected as the owners of wholesalers, then you are only required to have one bond. Simply provide the California State Board of Pharmacy a copy of the organization chart documenting the ultimate owner of the subsidiary companies verifying the familiar ownership.
In the future should the company or business be able to demonstrate their annual gross receipts of $10,000,000 or less, a new and lesser bond amount of $25,000 may be secured in lieu of the initial $100,000 bond amount.
Category: Commercial Bonds, Misc. Commerical BondsTags: california, pharmacy, wholesaler | Comments (0)
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New Jersey Driving School Bond
December 3, 2008 by Steve VargaOne of the requirements for obtaining a Driving School License from The New Jersey MVC (Motor Vehicle Commission) is to obtain a $10,000 Surety Bond. The Motor Vehicle Commission handles the issuance of licenses that allow driving schools and their instructors to function within the state of New Jersey. This also allows those specific private driving school owners and particular instructors or agents to procure student learners permits, examination permits, schedule road tests, etc.
As in most cases there are certain requirements for obtaining a license and some of those necessary for the New Jersey Driving School License are: The business is required to have a separate agency location or a home office separated from the living accommodations with a private entrance. The business cannot be located near or outwardly show that is it officially connected with Motor Vehicle Commission. The driving school cannot be operated from a liquor store, bar, grocery store, restaurant, temporary address, etc. The school must have a trained supervising teacher who’s licensed for at least two years and has completed at least 500 hours of behind the wheel training along with a three-credit college course from a state-accredited university or college. The school requires zoning consent from the town where the business is located, ensuring that the building will meet each of the state and local zoning ordinances which consist of building, fire and health codes and any other applicable ordinances and codes.
All driving schools must make available an explanation of services to be rendered, the fees for the school and description of information on the service agreement.
The driving school must also adhere to all conditions set forth in the sample service agreement. The service agreements must give all information contained in the state-provided sample service agreement.The driving school students have requirements as well. Each student must meet the following requirements prior to the driving school instructors being able to proceed with the lessons: Each student must be at least 16 years of age; they must pass the vision test providing certification from the school nurse, Motor Vehicle Commission representative, owner of the driving school or eligible supervising instructor.
There are four items that must be present at the location of the business for the scheduled site investigation from the MVC. The state requires a landline telephone, an answering machine for the phone, file cabinet(s) and a safe that have the ability to be locked when unattended and dual controlled vehicle(s) that are owned or leased and registered in the name of the driving school or lessor.
For further or more detailed information please visit New Jersey’s Motor Vehicle Commission website.
Category: Commercial Bonds, Misc. Commerical Bonds, OtherTags: driving school, new jersey | Comments (0)
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Business Bonding
November 19, 2007 by Michael WeisbrotThe term “bond” can be applied to many different financial products, but what is “business bonding”? To be bonded means that an insurance carrier is guaranteeing the performance of your business. This is not be confused with a corporate bond, which is a financial instrument used to raise capital.
When a business gets bonded it does not raise capital, but does bring security to any work performed by said business. How does business bonding work?
When a company is bonded, there are three parties involved. The first one is the company itself, referred to as the principal. The second party is the bonding company, also referred to as the surety or carrier. The third party is called the obligee. The obligee is the party that requires the business to be bonded. Here are two examples…-
Example #1: The Contractor – A contractor wants to do work for a local school. The Miller Act is a law that requires the contractor to post a bond to guarantee the work. If the contractor defaults, the surety would pay another contractor to finish the work.
Example #2: The Auto Dealer – An auto dealer wants to obtain a license to sell vehicles in the state that he resides. The state licensing department requires that the auto dealer post a bond to guarantee that he will follow the states rules and regulations for selling vehicles. If the dealer were to be fraudulent, the victim could make a complaint to the state and the state could then file a claim on the bond to help the victim re-coop any moneys lost.
Some common bonding misconceptions
Getting your business bonded helps protect it – Not true, getting your business bonded actually protects your clients! If a claim arises, the surety will look to your company for repayment.Everyone qualifies for bonding – Not everyone qualifies for surety bonding. True surety underwriting makes it so that only the most financially sound and responsible companies qualify for bonding (However, most do these days with the variety of programs available).
Everyone gets the same rate – Rates can vary greatly and can be changed due to your credit score, company’s financial strength, or what the bond is actually guaranteeing.
If you are in need of a bond, you may want to read our last article, How To Become Bonded. It highlights some of our best articles to tell you how to get the best rate for your bond and what you need to do to ensure you qualify.
Category: Auto Dealer Bonds, Bid Bonds, Commercial Bonds, Contract Bonds, Contractor License Bonds, Court Bonds, General Bonding, Misc. Commerical Bonds, Money Transmitter Bonds, Mortgage Banker Bonds, Mortgage Broker Bonds, Performance Bonds, Subdivision Bonds, Telephone Solicitor Bonds, Title Agency Bonds, Wage & Welfare BondsComments (0)
